Happy New Year!
With 2023 behind us (except for how the IRS views it) we have ventured into 2024.
As is typical, many of us have made resolutions for personal improvement. Lose weight, exercise more, quit something, start something, the list goes on. All are admirable personal goals.
But how many have made business resolutions? Grow your business, reduce complexity, allocation of resources, getting additional resources, new business opportunities, etc.
When we started our businesses, we did it because we have a passion for what we do. Reality set in quickly, and we learned that a lot of running a business landed on the administrative side. Your accountant told you that you must track money in and money out. This was not what you thought you would be doing when you registered your business.
So, you ventured into the world of accounting software (in many cases QuickBooks) and all was great in the world. As your business grew, and you found out that there was data in that software available to help you make business decisions. Depending on your business type, it could be how much inventory you have, how much inventory you need, where your service vehicles are, who your most profitable customers are, and on and on. Perhaps you upgraded to a more advanced version of your software, or you purchased an add-on, or migrated to something more advanced (and more expensive) to get even better information to make better decisions, allowing your business to grow more rapidly.
The problem with software is new features and capabilities are added each year, with each upgrade. Some of the new features are obvious and helpful and get implemented quickly. But many of the features do not get implemented, because we have become so used to our processes and workarounds that we don’t consider how inefficient they actually are. Often when we at Mendelson Consulting work with clients to assist them in creating more efficient workflows and processes, we get resistance because “that’s the way we’ve always done it”. Those words are the #1 reason that new systems and efficiencies do not get implemented. What follows are a few real-life examples of this.
Many years ago, when I worked for Intuit as manager in the QuickBooks Point-of-Sale department (RIP, that is another story for another time), we used an internal database to track how much revenue sales agents were generating for each sale. We had agents do this manually because it allowed the managers to see what the sales numbers were at any point in the day/month. We found out that it took 3 minutes per sale to track this (additional to the time on the actual sales call). Doing simple math, each agent did approximately 20 orders a day, times 3 minutes per order, equaling 60 minutes or one hour of lost productivity per agent.
At the time we had 60 agents, so they were losing 60 hours of productivity each day. Here’s the problem: we did this to have visibility into the revenue by business line. The issue was that the reporting software had advanced so that information could be seen in real time without the step of additional manual tracking. We simply continued using the database because “that’s the way we’d always done it”. We corrected this inefficiency simply by asking the Intuit reporting team to add an “order subtotal” field to the database instead of breaking down the sales, eliminating the 3 minute per order breakdown.
Another example: Last year I purchased a new car. I had to take it in for a warranty recall. The appointment was 2 months away. When the appointment finally arrived, I asked the service advisor to check a rattle in the back. He said that would require a new appointment, which was again 2 months out. For my car brand, there are 3 dealerships in the area, all with the same 2-month appointment window. This is a blatantly missed opportunity for additional revenue. People cannot wait to service their vehicle; they will simply go somewhere else. It is disconcerting to think of how much revenue is being lost by these dealerships.
Let’s make 2024 a time to make some resolutions on what and how we are running our businesses. Let’s figure out how efficient we are. Is there a better way to accomplish our goals? Can we do things faster and less manually? Are there other sales opportunities we should be exploring? How much time are we spending on the things we don’t like doing, and how much time could be spent doing the things that we like? Should we be investing in better software? Are we using the best software to drive our business?
My favorite question to ask business owners is “What keeps you up at night”? So, I ask you, “what keeps you up at night?”
Let’s make 2024 a year to stop saying “that’s the way we’ve always done it” and turn it into “we’re doing it the way we should”. Let’s make our personal resolution to sleep better at night.
Connect with us today to get more information on a business process review.
